AUDUSD Forex Forecast – Start of a Reversal?

AUDUSD Forex Forecast - Start of a Reversal?
AUDUSD Forex Forecast - Start of a Reversal?AUDUSD recently made a strong downside break from its ascending trend line connecting the recent lows on the 4-hour time frame. This suggests that a reversal is in order, after price completes its pullback to the broken support.
The broken trend line coincides with the 61.8% Fibonacci retracement level on the latest swing high and low. If this keeps gains in check, price could resume its drop to the swing low at .7170 or much lower.
The area of interest also lines up with the moving averages, which might add an extra layer of resistance. In addition, the 100 SMA crossed below the 200 SMA to indicate that a downtrend is brewing.
Stochastic is already heading down from the overbought zone, which suggests that buyers are taking a break and letting sellers take over from here. RSI is also pointing south and AUDUSD might follow suit.

AUDUSD Fundamental Factors

Event risks for this trade setup include the US retail sales release on Friday’s US trading session, although stronger consumer spending numbers are expected. Jobs data from Australia actually surprised to the upside but the reliability of the results have been in question for quite some time so the gains weren’t sustained.
Earlier in the week, China printed downbeat trade figures, reflecting a decline in domestic demand. This could mean lower shipments of raw material products from Australia, possibly weighing on the country’s export levels.
In addition, iron ore prices have fallen to record lows, signaling weaker revenues for Australia’s exporters. Further commodity price declines could keep weighing on the Australian dollar and overall risk sentiment.
To contact the reporter of the story: Samuel Rae at